Partly allowed

Vanmalidasbhai R Virani v. State Bank of India

DRAT18 Oct 2023IA/534/2023

Case brief

AI extract

What is this about?

The DRAT dismissed an appeal seeking interim protection against physical possession. The court directed the appellants to deposit ₹42 lakhs as 50% pre-deposit within four weeks, relying on recent Supreme Court precedents regarding the bar on redemption and adjustment while challenging a sale. Failure to pay leads to dismissal.

What did the court decide?

Appellants directed to deposit ₹42 lakhs as pre-deposit within four weeks; taking over possession deferred.

Vanmalidasbhai R Virani versus State Bank of India — Banking and Recovery | DRAT (2023)

¶1

BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson I.A. No. 534/2023 (WoD)

¶2

In Appeal on Diary No. 1311/2023

¶3

Between

¶4

Vanmalidasbhai R. Virani & Ors. … Appellant/s

¶5

V/s.

¶6

State Bank of India …Respondent/s

¶7

Ms Gayatri Nayak along with Mr. Akash Tayade, i/b R.P. Khobragade, Advocate for Appellants.

¶8

Mr. Omkar Kelkar, Advocate for Respondent No.1

¶9

Mr. M.R. Gupta, Advocate for Respondent No.2

¶10

Mr. Advait Hattangadi, i/b M/s. Raval-Shah & Co., Advocate for Respondent No.3

¶11

-: Order dated:18/10/2023:-

¶12

The Appellants are in appeal impugning the order dated 27.06.2023 in Interlocutory Application (I.A.) No. 393 of 2023 in Securitisation Application (S.A.) No. 390 of 2018 on the files of the Debts Recovery Tribunal-II, Ahmedabad (D.R.T.) wherein the prayer of the Appellants for redemption as well as for interim relief and protection against the action to take physical possession of the secured asset were declined. The Appellants are admittedly borrowers and as per the auction notice till the date of auction inclusive interest, the Appellants are liable to pay for a sum of ₹84,00,876.41 to the creditor. The Appellants do not have the right to redeem the property in view of the latest decision of the Hon’ble Supreme Court in Celir LLP vs. Bafna Motors (Mumbai) Pvt. Ltd. & Ors. 2023 SCC OnLine 1209 . The only

¶13

¶14

prayer with regard to the interlocutory relief of protecting the possession of the property of the Appellants remains. Going by the order of the Ld. Presiding Officer and the pleadings of the parties, I find that the Appellants do not have a prima facie case and there is also no plea for any financial strain pleaded in the application for waiver of pre-deposit wherein it is contended that the Appellants are entitled to get a complete waiver in view of the fact that there is excess amount lying with the bank consequent to the sale of the property.

¶15

In view of the decision of the Hon’ble Supreme Court iⁿ S idha Neelkanth Paper Industries Pvt. Ltd. & Ano. vs. Prudent ARC Ltd & Ors., 2023 SSC OnLine SC 12 , the Appellants are not entitled to an adjustment of the amount received from the sale of the property as long as they are challenging the sale. The sale is admittedly challenged by the Appellants and therefore, the Appellants are liable to pay 50% of the amount which is due from them including interest as of the date of sale which is ₹84,00,876.41. The 50% would come to ₹42 lakhs and odd amount. The Appellants are, therefore, directed to pay ₹42 lakhs as pre-deposit within a period of four weeks i.e. on or before 15.11.2023. In default of the payment of the said amount in time, the appeal shall stand dismissed without any further reference to the Tribunal.

¶16

On the payment of the said amount, the intended taking over possession of the secured asset shall be deferred till the next date of hearing.

¶17

The amount shall be deposited in the form of a Demand Draft with the Registrar of this Tribunal.

¶18

¶19

As and when the said amounts are deposited, they shall be invested in term deposits in the name of Registrar, DRAT, Mumbai, with any nationalised bank, initially for 13 months, and thereafter to be renewed periodically.

¶20

With these observations, the I.A. is disposed of. The Respondent is at liberty to file a reply in the Appeal with an advance copy to the other side.

¶21

Post on 16.11.2023 for reporting compliance regarding the payment.

¶22

^Sd/- Chairperson

¶23

mks-05

¶24

Vanmalidasbhai R Virani v. State Bank of India

Case brief

What is this about?

What did the court decide?

Vanmalidasbhai R Virani v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

Punjab National Bank versus Smt Tajbano Khadimm Khan & Ors.

Ms Norton Industries versus Punjab National Bank

Vishnukant Upadhyay and Anr. versus Bandhan Bank

Dimple Arcede Premises Co-op Soc. Ltd. versus Union Bank of India

Ms Geeta Narayandas Shivadasani versus Axis Bank Limited

Manikchand Dewasi versus Canara Bank